Bulls Are Fired Up for McMoRan Exploration

McMoRan Exploration

off shore oil rig
off shore oil rig

lit up with upside option activity yesterday.

Buyers snapped up the July 11 calls for $0.29 and $0.30. Some 8,000 of the contracts crossed OptionMonster’s tracking systems in the first hour of trading, and volumes continued to inch higher throughout the session. Open interest at the strike was just 1,000 contracts at the start of the day, so these were new positions.

McMoRan Exploration

Callslock in the price investors can pay for the stock, so they can generate major leverage if it rallies. But if it doesn’t, the value of those options will dwindle and could end up worthless.

McMoRan shares rose 5.28 percent to $9.17 yesterday, closing at its highs. The company engages in the exploration, development, and production of oil and natural gas in the shallow waters of the Gulf of Mexico and onshore in the Gulf Coast area.

More than 18,000 options traded in the name overall, compared with fewer than 4,000 in a typical session. Calls outnumbered putsby about 16,000 to 2,300.

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Pete Najarianis a professional investor, CNBC contributor, regular co-host of CNBC’s “ Fast Money ” and co-founder of OptionMonster.com . Najarian has no positions in McMoRan.